Each contributor whose employment with the highway patrol has been terminated may apply to the board for retirement benefits according to this section and rules adopted by the board consistent with this chapter. The following procedures apply:

1.    A contributor is entitled to credit for permanent employment or its equivalent from the date eligibility is attained until normal or postponed retirement date, as described in subsection 3.

2.    Retirement benefits are based on the contributor’s final average salary. Final average salary is the average of the highest salary received by the contributor for any thirty-six months employed during the last one hundred twenty months of employment. For contributors who terminate employment on or after August 1, 2010, final average salary is the average of the highest salary received by the contributor for any thirty-six months employed during the last one hundred eighty months of employment. For contributors who terminate employment between July 31, 2005, and August 1, 2010, final average salary is the average of the highest salary received by the member for any thirty-six months employed during the period for which the board has appropriate and accurate salary records on its electronic database, but that period may not be more than the last one hundred eighty months of employment. For members who terminate employment after December 31, 2019, final average salary is the higher of the final average salary calculated on December 31, 2019, or the average salary earned in the three highest periods of twelve consecutive months employed during the last one hundred eighty months of employment. Months without earnings are excluded for the purpose of computing an average. If the contributor has worked for less than thirty-six months at the postponed retirement date, the final average salary is the average salary for all months of employment.

3.    Retirement dates are as follows:

a.    Early retirement date is the first day of the month next following the month in which the contributor attains the age of fifty years and has completed at least ten years of eligible employment.

b.    Normal retirement date is:

(1) The first day of the month next following the month in which the contributor attains the age of fifty-five years and has completed at least ten years of eligible employment; or

(2) When the contributor has a combined total of years of service credit and years of age equal to eighty and has not received a retirement benefit under this chapter.

c.    Postponed retirement date is the first day of the month next following the month in which the contributor attains the age of sixty years.

d.    Disability retirement date is the first day of the month after a contributor becomes permanently and totally disabled, according to medical evidence called for under the rules of the board, and has completed at least one hundred eighty days of employment.

4.    The board shall calculate retirement benefits as follows:

a.    Normal retirement benefits for all contributors reaching the normal retirement date are payable monthly, and are:

(1) The first twenty-five years of credited service multiplied by three and sixty hundredths percent of final average salary.

(2) All years in excess of twenty-five years of credited service multiplied by one and three-fourths percent of final average salary.

(3) All contributors who retired before August 1, 2001, or their beneficiaries, are entitled to receive benefits equal to three and sixty hundredths percent of final average salary multiplied by the first twenty-five years of credited service, plus one and three-fourths percent of final average salary multiplied by credited service in excess of twenty-five years, with the increased benefits payable beginning August 1, 2001.

b.    Early retirement benefits are normal retirement benefits accrued to the date of termination of employment, but actuarially reduced to account for benefit payments beginning before the normal retirement date.

c.    Postponed retirement benefits, for all contributors reaching the postponed retirement date, are calculated in the same manner as normal retirement benefits.

d.    Disability retirement benefits are payable monthly and are:

(1) Seventy percent of the contributor’s final average salary, reduced by any workforce safety and insurance benefits paid. The minimum monthly disability retirement benefit under this subsection is one hundred dollars.

(2) An individual or that person‘s beneficiary who, on July 31, 2001, is receiving a disability retirement benefit is entitled to receive an increase in benefits equal to six percent of the individual’s present benefits, with the increase payable beginning August 1, 2001.

5.    On termination of employment after completing ten years of eligible employment but before the normal retirement date, a contributor who does not elect to receive early retirement benefits is eligible to receive deferred vested retirement benefits. The deferred benefits are payable beginning on the contributor’s normal retirement date in one of the forms provided in this section. Contributors who have delayed or inadvertently failed to apply for retirement benefits to commence on their normal retirement date may choose to receive either a lump sum payment equal to the amount of missed payments, or an actuarial increase to the form of benefit the member has selected, which increase must reflect the missed payments. The final average salary used for calculating deferred vested retirement benefits must be increased annually, from the later of the date of termination of employment or July 1, 1991, until the date the contributor begins to receive retirement benefits from the fund, at a rate as determined by the board not to exceed a rate that would be approximately equal to annual salary increases provided state employees pursuant to action by the legislative assembly.

6.    If before retiring a contributor dies after completing ten years of eligible employment, the board shall pay the contributor’s accumulated deductions to the contributor’s designated beneficiary as provided in this subsection. If the contributor has designated an alternate beneficiary with the surviving spouse’s written consent, the board shall pay the contributor’s account balance to the named beneficiary. If the contributor has named more than one primary beneficiary, the board shall pay the contributor’s    account balance to the named primary beneficiaries in the percentages designated by the contributor or, if the contributor has not designated a percentage for the beneficiaries, in equal percentages. If one or more of the primary beneficiaries has predeceased the contributor, the board shall pay the predeceased beneficiary’s share to the remaining primary beneficiaries. If there are no remaining primary beneficiaries, the board shall pay the contributor’s account balance to the contingent beneficiaries in the same manner. If there are no remaining designated beneficiaries, the board shall pay the contributor’s account balance to the contributor’s estate. If the contributor has not designated an alternate beneficiary under this section or the surviving spouse is the beneficiary, the surviving spouse of the contributor may select one of the following optional forms of payment:

a.    A lump sum payment of the contributor’s accumulated deductions as of the date of death.

b.    Payment of a monthly retirement benefit equal to fifty percent of the deceased contributor’s accrued normal retirement benefits until the spouse dies.

7.    If a contributor not eligible for the benefits of subsection 6 terminates employment for any reason before retirement, the contributor or the contributor’s designated beneficiary is entitled to the contributor’s accumulated deductions at termination.

8.    The surviving spouse of a member receiving retirement benefits must be the member’s primary beneficiary unless there is no surviving spouse or the surviving spouse designates an alternate beneficiary in writing. If a contributor receiving retirement benefits, or a contributor’s surviving spouse receiving retirement benefits, dies before the total amount of benefits paid to them equals the amount of the contributor’s accumulated deductions at retirement, the difference must be paid to the named beneficiary of the recipient or, if there is no named beneficiary, to the recipient’s estate.

9.    The board shall adopt rules providing for the receipt of retirement benefits in the following optional forms:

a.    An actuarially equivalent joint and survivor one hundred percent option. b.    An actuarially equivalent life with ten-year or twenty-year certain options.

c.    An actuarially equivalent partial lump sum distribution option with a twelve-month maximum lump sum distribution.

d.    An actuarially equivalent graduated benefit option with either a one percent or two percent increase to be applied the first day of January of each year.

Unless a contributor requests that the contributor receive benefits according to one of these options at the time of applying for retirement, all retirement benefits must be in the form of a lifetime monthly pension, with a fifty percent option to the surviving spouse.